Posts Tagged ‘safety’

Big Pharma: Even Worse Than Used Cars as a Market for Lemons?

Big Pharma: Even Worse Than Used Cars as a Market for Lemons?

Courtesy of Yves Smith at Naked Capitalism 

Fruit at market

Some readers have wondered why this blog from time to time runs posts on the US health care system. Aside from the fact that it’s a major public policy problem in America, it is also a prime example of bad incentives, information asymmetry, and corporate predatory behavior. It thus makes for an important object lesson.

Reader Francois T pointed to an example, a commentary on a paper presented by Donald Light at the annual meeting of the American Sociological Association, “Pharmaceuticals: A Two-Tiered Market for Producing ‘Lemons’ and Serious Harm.” It still appears to be embargoed, but Howard Brody provides an extensive summary on his blog.

Light uses George Akerlof “market for lemons” as a point of departure. For those not familiar with the famed Akerlof paper, a “market for lemons” can occur when consumers are unable to distinguish product quality. The used car market is the paradigm, since the dealer has a much better idea than the buyer of whether a particular car is any good. Unscrupulous operators can stick a lot of hapless chump customers with overpriced clunkers. However, as crooked vendors become more common, buyers wise up a tad and are not longer to pay as much for cars they cannot evaluate. So while the prices buyers are now willing to pay are probably still too high for rattletraps, they are too low for decent cars. People with good merchandise start to look for other channels. Akerlof posits that the market eventually falls apart.

Note that used cars dealers did not set out to create lemons; the cars were bad deals by being overpriced (presumably, if they had been presented, warts and all, they still would have found purchasers, presumably people who thought they could repair them and those who wanted them for parts and scrap). Light contends, by contrast, that major pharmaceutical companies create bad products:

[T]he pharmaceutical market for ‘lemons,’ differs from other markets for lemons in that companies develop and produce the lemons. Evidence in this paper indicates that the production of lemon-drugs with hidden dangers is widespread and results from the systematic exploitation of monopoly rights and the production of partial, biased information about the efficacy and safety of new drugs…Companies will design and run their clinical


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Another Safety Issue: Can Toyota Ever Bounce Back?

Another Safety Issue: Can Toyota Ever Bounce Back?

By Joseph R. Szczesny, courtesy of TIME 

A Toyota dealership advertises a 0% interest rate on the windshield of an unsold 2010 Toyota Matrix in Lakewood, Colo.

David Zalubowski / AP

The flood of recalls — nearly 9 million vehicles in the past 12 months — and reams of nasty publicity involving runaway cars and unintended acceleration seemed finally to have abated for the beleaguered automaker Toyota. Then, on Tuesday, the National Highway Traffic and Safety Administration (NHTSA) said it was intensifying its investigation into another potential Toyota safety issue: sudden-stalling problems on its Corolla and Matrix models.

This new NHTSA move, a formal engineering investigation of the Matrixes and Corollas from model years 2005 to ’07, stems from more than 1,000 complaints that have been received by Toyota and the NHTSA. It could possibly lead to another major round of recalls if mechanical or electrical problems are found. (See the 50 worst cars of all time.)

The investigation is just the latest in a barrage of challenges — and heavy damage — to the once gilt-edged reputation of the world’s top automaker. While solidly profitable during the first quarter of fiscal year 2011, the company still has a way to go before it can repair that reputation. "They are still a successful company, they just aren’t on a pedestal anymore," says Rebecca Lindland, an analyst with IHS Global Insight.

"This controversy has damaged our reputation," acknowledges Toyota spokesman John Hanson, referring to the sudden-acceleration issue. But it’s about more than just reputation: Toyota faces liability claims over incidents that have been blamed for 79 deaths and hundreds of crashes.

Earlier in August, Toyota executives were heartened to receive a report from the NHTSA that the agency hadn’t found any evidence that faulty electronics played a role in sudden-acceleration accidents, and instead suggested driver error…
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Corporate Rotten Eggs

Robert Reich suggests creating a "national database of corporate crimes and settlements" to help regulators keep track of corporations that have a history of disregarding safety concerns.  As long as the fines for individual violations is less than the profits realized in the course of business, there is no incentive for these corporations to clean up their act.  To do that, the penalties need to be exceed the rewards and inflict some real pain on the corporation, owners, managers and shareholders. This is particularly important with serial offenders because the culture of the company does not change as a result of minor fines, just as the sociopathic nature of hard core criminals does not get cured by a three month stay in prision. – Ilene 

Corporate Rotten Eggs

PICTURED IS A CRACKED, UNCOOKED EGG, SHOWING THE YOLK AND THE WHITE, OR ALBUMEN, OF THE HEN'S EGG. CRACKED UNCOOKED EGG SHOWING YOLK AND WHITE

Courtesy of Robert Reich 

There are rotten apples in every industry. Or perhaps I should say rotten eggs.

One especially rotten egg is Jack DeCoster, whose commercial egg agribusiness, which goes under the homey title “Wright County Egg,” headquartered in Galt, Iowa, sends eggs all over the country under many different brands. Those eggs have now laid low thousands of Americans with salmonella poisoning, and may well infect thousands more.

DeCoster is recalling 380 million eggs sold since mid-May. Another commercial egg company, also headquartered in Iowa, and in which DeCoster is a major investor, is recalling hundreds millions more.

It’s not clear how rotten eggs are recalled. They’re not like Toyotas. They’re already in our food supply. 

But this is only the beginning of the story.  

Thirteen years ago when I was Secretary of Labor, DeCoster agreed to pay a $2 million penalty (the most we could throw at him) for some of the most heinous workplace violations I’d seen. His workers had been forced to live in trailers infested with rats and handle manure and dead chickens with their bare hands. It was an agricultural sweatshop.

Several people in Maine told me the fine wouldn’t stop DeCoster. He’d just consider it a cost of doing business. Evidently they were right. DeCoster’s commercial egg business has a record that would make a repeat offender blush.

In 2003, DeCoster pleaded guilty to knowingly hiring undocumented immigrants (who don’t complain about unsafe working conditions, below-minimum-wage pay, and unsanitary facilities). DeCoster paid a record $2.1 million penalty for that one.

In the 1990s he was charged by…
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BP Pressured Worker, 30-Year Old Playbook Response

BP Pressured Rig Worker to Hurry Before Disaster, Father Says

Oiled Guillimot after Empress oil spill,West Wales

By Joe Carroll and Laurel Brubaker Calkins, Bloomberg

May 28 (Bloomberg) — The highest-ranking crew member to perish aboard the Deepwater Horizon drilling rig warned his family that BP Plc was pressuring him to sacrifice safety for the sake of time and money, his father said.

Jason Anderson, one of 11 rig workers presumed dead after an April 20 explosion and fire sank the Deepwater Horizon and triggered the worst oil spill in U.S. history, told relatives in February and March that BP was urging him to accelerate work on the Macondo well off the Louisiana coast, said his father, Billy Anderson.

On previous wells drilled with the same rig, Jason Anderson, a 35-year-old employee of vessel owner Transocean Ltd., had been able to convince BP representatives to eschew shortcuts that he believed would compromise safety, his father said. But in the eight weeks preceding the disaster, BP stepped up the pressure and overruled safety objections, Billy Anderson, 66, said.

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BP Using 30 Year-Old Playbook in Responding to Oil Spill? 

Washington’s Blog

Preface for my conservative readers: Yes, I know … Maddow is very liberal. But her claims are either true or they are not true. Let’s focus on her claims. If anyone can refute them, let me know, and I’ll post a retraction.

Rachel Maddow claims that a top kill type maneuver – pumping in cement and saltwater – was tried during the giant 1979 Ixtoc oil spill, but didn’t work.

Maddow also says:

  • The precursor to the same company operating the Deepwater Horizon drilling well – Transocean – operated the Ixtoc rig
  • The cause of both oil spills was the same: a malfunctioning blowout preventer
  • The location of the spill was the same: the Gulf
  • The sizes of both spills were massive
  • A "top hat" operation was attempted unsuccessfully. During the Ixtoc spill, it was named


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Zero Hedge

Dow Drops Below 30,000, Global Rally Fizzles Ahead Of Data Deluge

Courtesy of ZeroHedge View original post here.

US index futures dropped alongside shares in Europe with Dow Jones futures sliding back under 30,000...

... as a furious three-day rally paused ahead of a slew of pre-holiday economic indicators. Data, from jobless claims to consumer confidence and personal income, are due before markets close and traders head off for Thanksgiving.Ppositive vaccine news and the formal start of President-elect Joe Biden’s transition to power - including the selection of Jan...



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ValueWalk

Which Of Workhorse Or Nikola Stock Would Grow The Most

By Benzinga. Originally published at ValueWalk.

Every week, Benzinga conducts a sentiment survey to find out what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios.

Q3 2020 hedge fund letters, conferences and more

We surveyed a group of over 300 Benzinga investors on whether shares of Workhorse Group Inc (NASDAQ:WKHS) or Nikola Corporation (NASDAQ:NKLA) stock would grow the most by 2025.

Over the next five years, which stock will have the largest percentage ...



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Phil's Favorites

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

 

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

Now there is a third possible vaccine for fighting the COVID-19 pandemic. Jakub Porzycki/NurPhoto via Getty Images

Courtesy of Sanjay Mishra, Vanderbilt University

The biopharmaceutical company AstraZeneca has released data on what is now the third promising vaccine candidate against COVID-19 – and it has several advantages over those of its competitors, ...



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Biotech/COVID-19

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

 

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

Now there is a third possible vaccine for fighting the COVID-19 pandemic. Jakub Porzycki/NurPhoto via Getty Images

Courtesy of Sanjay Mishra, Vanderbilt University

The biopharmaceutical company AstraZeneca has released data on what is now the third promising vaccine candidate against COVID-19 – and it has several advantages over those of its competitors, ...



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Politics

TRUMP CONCEDES (SORT OF)

 

TRUMP CONCEDES (SORT OF)

Courtesy of Teri Kanefield

The Trump Legal team filed more documents today in the appellate court. I tweeted a bit about how silly they were (let me know if you all want me to march through them). Then this happened:

Trump giving the go-ahead for the transition to get underway was (I believe) the closest he will get to conceding the election. Two amusing things happened. First, Trump tweeted this about 10 minutes after Emily Murphy submitted a letter saying she would move forward, and that she has made her decisions solely on her own and not at anyone’s direction. Looks like Trump wanted people to think that she was, in fact, acting at his direction.

The other amusing part was that Tr...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Friday, 12 June 2020, 08:06:43 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Interesting (2)



Date Found: Saturday, 13 June 2020, 12:27:02 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Recession Forecasts Time Frame



Date Found: Monday, 15 June 2020, 11:07:52 PM

...

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Kimble Charting Solutions

Transports Sending Strong Bullish Message To Other Dow Indices?

Courtesy of Chris Kimble

Are Transportation stocks about to send a quality bullish message to other Dow indices this month? Sure could be!

This 3-pack looks at the Dow Jones Industrials, Transports, and Utilities indices on a monthly basis.

One week from the end of a month, the DJ Transports are attempting an important bullish breakout at (1). Unless a sharp reversal takes place in the next week, Transports could close out the month at new monthly closing highs!

The Dow is attempting to close at all-time highs this month, while the Dow Utilities Index remains a few percent below 2020 highs....



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Digital Currencies

Dalio Admits "I Might Be Missing Something" As Bitcoin Surges Above $18,000

Courtesy of ZeroHedge

Since the US election, Bitcoin prices (in USD) have surged a stunning 40%, also lurching higher after each vaccine headline hit.

Source: Bloomberg

Getting ever closer to its all-time record high...

Source: Bloomberg

As crypto prices soared overnight, Bridgewater Associates founder Ray Dalio stepped back into the fray, saying in a Twitter thread that “I might be missing something about Bitco...



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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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